GMR Group to sell 74% stake in expressway to IIF to raise equity
18 Sep 2013
Infrastructure group GMR will divest 74-per cent stake in GMR Ulundurpet Expressways Private Limited to India Infrastructure Fund (IIF) for Rs222 crore to slash debt by Rs459 crore.
"GMR Group's Asset Right and Asset Light Strategy, GMR Highways Ltd, has signed a definitive agreement with India Infrastructure Fund (IIF) to divest 74 per cent stake in GMR Ulundurpet Expressways Private Limited (GUEL)," the diversified company said in a statement.
IIF, a unit of Infrastructure Development Finance Company (IDFC) emerged as the successful bidder for the GUEL stake, GMR said in its statement.
GMR Group will receive a consideration of about Rs222 crore for the sale of 74 per cent equity stake, it said, adding that the transaction is subject to closing conditions customary to such transactions.
This is the GMR group's second such divestment in the roads portfolio.
''This transaction signifies GMR Group's ability to successfully implement its asset-light-asset-right strategy under challenging market conditions. We at GMR Group continue to focus on creating liquidity and reducing our leveraged position as part of the strategy of churning of assets. The GMR Group will continue to focus in adopting this approach in other businesses as well,'' said Madhu Terdal, CFO of GMR Group.
The divestment will help GMR infuse equity funds to the tune of Rs222 crore, Terdal added.
"This investment is our first major acquisition and a step in the direction of implementing our road sector strategy of acquiring control of operational projects with proven traffic history. We look forward to continue working with GMR in building and operating quality infrastructure assets in India," M K Sinha, managing partner and CEO of IDFC Alternatives, said.
GUEL operates the highway stretch of about 73 km, from Tindivanam to Ulundurpet on National Highway 45 in Tamil Nadu. The project commenced commercial operations in July 2009
IIF is one of the largest infrastructure focused funds and has a well-diversified portfolio with existing investments in roads, ports, conventional and cleantech energy assets.
